To quote Winston Churchill, “History will treat me well because I plan to write it.” It would seem from his July 5 BDN OpEd, former state Sen. Edward Youngblood takes that quote literally. His OpEd, however, exceeds the normally acceptable limits of self-aggrandizement by historical rewrite.
The OpEd references the actions by the Legislature in May 2014 that resulted in Statoil leaving Maine to build an offshore wind project in Scotland instead of here in Maine. The Scotland project that could have been here is expected to be operational by the end of 2017.
The problem arises with his “little background” account of what happened. Let me correct a few items.
He suggests that Statoil had been working with the University of Maine for years and elected to submit a proposal for funding from the U.S. Department of Energy “after benefiting from UMaine’s research and resources.”
Actually, Statoil had already built and operated the world’s first floating windmill in the North Sea in 2009. Gov. John Baldacci led a group that included UMaine officials to Norway to see the finished product and meet with Statoil to see if a partnership could be beneficial. The idea was to join UMaine’s research work with a financial partner to apply for upcoming Department of Energy funding and to build an offshore wind project off the coast of Maine.
The “ massive omnibus energy bill” that Youngblood refers to called for the state to purchase $75 million per year in new natural gas pipeline capacity for 20 years, the bill for which Maine electricity ratepayers would foot. The theory behind this boondoggle was that bringing more natural gas into New England would lower gas prices by enough to more than offset that $75 million per year charge. This theory has since been debunked by three separate economic studies, including a 2015 report from Boston-based consulting firm London Economics International that put the economic benefit to Maine for the $75 million per year investment at $14.6 million. A Maine Public Utilities Commission report recommended against this investment.
In order to save this ill-advised bill from a Gov. Paul LePage veto the “remarkably innovative concept” that Youngblood and company came up with was to require the Public Utilities Commission to reopen the bidding for the energy contract that Statoil already won in the initial bid process to allow UMaine to submit a bid after they had the benefit of seeing Statoil’s original winning bid. In private business, a move like this would result in a lawsuit. It did result in Statoil pulling out of Maine because of the unfairness of the process.
Youngblood is right about one thing: Maine being among the first to develop offshore wind would result in “hundreds of new jobs” in Maine. Because of this, it is good news that UMaine is back in the running for this latest round of funding.
The problem is that even if it obtains the $40 million federal grant, the project will require an additional investment of $100 million or more, based on Statoil’s original estimate for the project. This means that UMaine will need a financial partner with deep pockets to make the project a reality. Sadly, it had a financial partner in place years ago until the “remarkably innovative” move caused that partner to pull out.
To recap what really happened, the state of Maine conducted a bid process through the Public Utilities Commission that Statoil won and was awarded a letter of intent. The Maine Legislature passed a bill forcing the Public Utilities Commission to renege on the deal, thereby telling the world’s business community that the state’s word cannot be trusted and forcing the financial partner out of the state.
All to save a proposal that three separate economic studies have determined to be a bad deal. It’s hardly a “proud moment” for Maine.
Jack Cashman of Brewer is a former chairman of the Maine Public Utilities Commission.